Old Mutual profit rises 16% on economic growth in US and UK
Improving economic growth in Britain and the US saw insurance and investment group Old Mutual report a 16% increase in its operating profit for 2014, after a year of significant strategic development.
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The company said operating profit rose to £1.6bn, while analysts had expected a figure closer to £1.56bn.
Net client cash flow was £4.9bn, with funds under management rising 6% in constant currency terms to £319bn.
The Anglo-South African group brought its fund management arm Old Mutual Asset Management to market in 2014, though it retained a 78% stake in it, while its wealth arm acquired money manager Quilter Cheviot for £585m late last year.
Meanwhile, Nedbank, the South African's bank in which Old Mutual has a majority stake, bought a 20% interest in African bank Ecobank last year and unveiled plans to secure a majority stake in Kenyan insurance firm UAP Holdings.
Nedbank warned that economic conditions in South Africa remained relatively weak but added that equities delivered a strong performance.
"Our focus now is on integrating the acquisitions, delivering operational improvements and creating value from these investments," the company said.
Old Mutual said it would pay a final dividend of 6.25 pence per share, with a total dividend of 8.7 pence, in line with forecasts.
Analysts at Shore Capital reiterated their 'hold' rating on the shares.
"We await evidence of any success the group has in developing its wealth platform in the UK before turning more bullish on the stock," they said.
Old Mutual shares were up 1.19% to 226.00p at 08:19 on Friday.